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HMRC internal manual

VAT Personal exports - tax-free sales of new motor vehicles for use before export

HM Revenue & Customs
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Assurance procedures: assurance checks

The following table explains the checks assurance officers should carry out to ensure dealers are operating the scheme correctly. Dealers should be aware of the contents of Notice 705A containing the conditions which must be met.

Dealer Assurance Officer
Dealers must observe the following requirements when they make supplies under the PES.  
  1. A copy of the serially numbered VAT 410 is to be retained.
  2. A record is to be kept, available for inspection on request, of all vehicles supplied under PES, including:
* date of delivery of vehicle;
* applicant’s name and address;
* particulars of the vehicle supplied, including type, chassis and registration numbers;
* amount of VAT remitted;
* a certificate of receipt for the vehicle signed and dated by the approved applicant (or other person permitted under [VEXMOTORS3400](;
* intended date of departure from the European Community.
  1. New vehicles only: a pink registration book (VX 302) is to be issued to the purchaser and the required details are entered on pages 5 and 8 of the VX 302.
  2. Used vehicles only: the PES documentation must be cross-referenced to either:
* the second-hand margin scheme stock book for used vehicles that are within the second-hand margin scheme; or
* in the used vehicles stock book for VAT qualifying used cars.

The entry in both stock books should show the VAT due as “Nil” and the VAT rate as “zero-rate”.
  1. Supplies of vehicles that are being financed using hire purchase must be declared in either stock book as taxable UK supplies. The VAT 410 must show the HP company as the supplier of the vehicle under PES (see VEXMOTORS3300 above).
  In addition to checking that the dealer understands and observes the conditions of the scheme, check that:
  1. the VAT 410s are serially numbered and up to date;
  2. new sales staff are instructed how to operate the scheme correctly;
  3. the records are maintained satisfactorily;
  4. new vehicles only: the trader is properly completing the pink registration books;
  5. used vehicles only: check that the PES documentation is consistent with used-vehicle records and that the stock book entry has been properly closed;
  6. hire purchase sales are being dealt with correctly.

The dealer is to be advised of the correct procedures to be followed if deficiencies are found. Advise the Personal Transport Unit (PTU) of action taken - see VEXMOTORS1300 for contact details. This will assist in identifying trends or weaknesses in practice and allow remedial action to be instigated.